Disposal

RNS Number : 9464S

Ovoca Gold PLC

20 September 2010

 

Ovoca Gold Plc ("Ovoca" or the "Company")

Sale of Murmansk Region assets for US$1.25 million

Ovoca announces that it has entered into a share purchase agreement to sell the Company's wholly owned subsidiary Norplat Limited to Grangesberg Iron Ore Plc, a private company incorporated in the Isle of Man, for US$1.25 million cash.  Norplat Limited has a 95% interest in the Oleninskoye gold project and the Pellapakh copper-molybdenum project in the Murmansk Region of Russia. The consideration will be paid in two installments with US$0.1 million payable immediately and the remaining US$1.15 million payable before 31 March 2011.

In the year ended 31 December 2009, Norplat made a profit after taxation of €178,000 and the net asset value of Norplat as at 31 December 2009 was €2,720,076.

Tim McCutcheon, CEO, comments: "The sale of our Norplat subsidiary and exit from the Murmansk Region is part of the Company's strategy to focus our financial and management resources on Ovoca's Magadan properties. The Oleninskoye and Pellapakh projects have potential, however we believe that the current form of ownership will not unlock that value and is not priced into Ovoca's share price. As such, the Company is selling Norplat and will redeploy capital."

Notes to Editors

Ovoca Gold PLC ("Ovoca" or "the Company") is a mineral exploration and mine development company listed on the AIM market of the London Stock Exchange (Ticker: OVG) and on the IEX market of the Irish Stock Exchange (Ticker: OVX). The Company's principal activity is gold exploration in the Magadan Region of the Russian Federation. Previously Ovoca acquired, developed and sold to JSC Polymetal the Goltsovoye silver project located in the Magadan Region.  Currently, Ovoca is aggressively exploring and developing its 100 per cent owned Stakhanovsky, Rassoshinskaya and Nevsko-Pestrinskoye licenses.

Stakhanovsky is located approximately 40 kilometres north of Susuman, the second largest city in the Magadan region.  It is accessible by year-round road and there is power infrastructure on site. Internal preliminary estimates suggest a gold resource (non JORC code of Russian standard compliant) of over 700,000 ounces.  The Company intends to put Stakhanovsky into production by 2013.

Rassoshinskaya is in the North Eastern part of the Magadan Region about 200 kilometres from the town of Simchan. There is no nearby infrastructure. Rassoshinskaya hosts an epithermal gold deposit named Olcha, which is the focus of Ovoca's exploration program. Olcha and nearby satellite deposits have the potential to host a high grade multi-million ounce gold resource.

Nevsko-Pestrinskoye is located in the central part of the Magadan region near the town of Omsukchan. A year-round road and powerline are near the site. The license completely surrounds the Goltsovoye silver deposit, which was owned by the Company from 2006 - 2009 and sold to JSC Polymetal for US$47.7 million at the time of closing. Ovoca intends to investigate and explore known mineral occurrences that extend beyond the Goltsovoye license area onto Nevsko-Pestrinskoye.

Ovoca Gold Plc

Timothy McCutcheon [phone] [e-mail]

Davy

John Frain [phone]

 

END

 

 

DISKKKDPOBKKCCB